Foreign income of Australian residents working overseas

As an Australian resident, you are taxed on your worldwide income. This means you must declare all income you receive from foreign sources in your income tax return.

Foreign income you receive as an Australian resident may be taxed in both Australia and the country from which you received it. If you have paid foreign tax in another country on foreign income you received, you may be entitled to an Australian foreign income tax offset. Refer to Guide to foreign income tax offset rules.

If you are an Australian Government agency employee (and not a member of a disciplined force), you now pay tax on income from delivering Australian official development assistance (ODA). Members of a disciplined force delivering ODA are still eligible for exemption.

You must also declare foreign income that is exempt from Australian tax as we may take it into account to work out the amount of tax you have to pay on your assessable income. For information about exempt foreign employment income you should not include in your tax return, refer to Exempt foreign employment income.

Certain capital gains made by Australian companies on the disposal of their shares in foreign companies with underlying active businesses, subject to conditions

Proposed measures

The government is continually reviewing international tax arrangements. For more information about how potential international legislative changes may affect you, refer to New legislation.

If you need help with applying this information to your own situation, phone us on the number that best matches your situation.

Tax treaties and exchange agreements

Australia has tax treaties with more than 40 countries. Tax treaties are also referred to as tax conventions or double tax agreements (DTA). They prevent double taxation and fiscal evasion, and foster cooperation between Australia and other international tax authorities by enforcing their respective tax laws.

Australia has also entered into a number of tax information exchange agreements to promote international cooperation in tax matters through the exchange of information.

Audit and verification checks

We do audit and verification checks and we match the tax-related information provided in tax returns with data we collect from other parties, such as:

banks

financial institutions

investment bodies

employers

other government agencies.

We recommend you ensure your bank has correctly recorded all your details, such as your name, address and tax file number. This will avoid any unnecessary follow-up action being taken by Australia or another country if a discrepancy is found.

Our commitment to you

We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.